Borrowed Down Payment

Sagen’s Borrowed Down Payment Program helps make it possible for a borrower to start building equity in a home without having to save for years.

Acceptable Loan Purpose and Applicable Loan-to-Value Limits

Purchase Transactions

• 90.01% -95% LTV where any portion of the down payment is from borrowed resources.
• Property value ≤ $500,000 –5% down payment required.
• Property value > $500,000 and < $1,000,000–5% down payment required up to $500,000, with an additional 10% down payment on the portion of the home value above $500,000.

Loan Security

• First mortgages

Eligible Properties

• Maximum 2 units where 1 unit must be owner occupied.
• New construction covered by a Lender approved New Home Warranty Program*.
• Existing resale properties.
• Readily marketable residential dwellings, located in markets with demonstrated ongoing re-sale demand
• Estimated remaining economic life of the property should be a minimum of 25 years.

_{*For new construction properties in the territories (Yukon, Northwest and Nunavut Territories) where New Home Warranty is not an option, Lenders must obtain either the occupancy permit or a third-party report from a qualified professional such as: an inspector, architect or engineer. The qualified professional must carry the appropriate liability insurance and confirm construction is completed in compliance with applicable bylaws and regulations.}

Maximum Property Value

• Property value must be less than $1,000,000.

Qualifying Terms and Interest Rate

• Fixed, standard variable, capped variable and adjustable rate mortgages are permitted.
• Maximum interest rate term of 25 years.
• The qualifying interest rate is the greater of the contract rate plus 2 % or 5.25 %.

Amortization Options

• Up to 30-year amortization
• For greater than 25-year amortization, refer to 30-year amortization eligibility criteria.

Premium Rate

The premium payable will be the lesser of the premium as a % of the total new loan amount or the premium as a % of the top -up portion on the additional loan amount (if existing insured) based on the rates below:

The mortgage insurance premium is non-refundable, paid at the time of closing and may be added onto the mortgage.

Borrower Qualification

Income and Employment

• Standard income and employment verification requirements apply.

Credit

• 90.01-95% LTV Minimum credit bureau score of 650 is recommended.

Down Payment

• Qualified home buyers may use non-traditional sources of down payment including borrowed sources that are arm’s length to the purchase or sale transaction such as personal loans, lines of credit or credit cards, gifts from an individual who is not related to the borrower through a familial or legal relationship.
• Repayment of borrowed funds must be included in the TDS calculation.

Additional Criteria

• Non-residing co -borrowers are acceptable (must be an immediate family member and on title).
• Non-residing guarantors are not permitted.
• Lender to ensure that the borrower has the resources to accommodate all closing costs for the mortgage transaction. These funds may be borrowed provided any associated repayments are included in the TDS calculation based on a 12 -month repayment period.

GDS / TDS Guidelines

Documentation Requirements

• Standard documentation requirements apply.
• Sagen may request that the Lender provide a copy of the required documentation on a case-by- case basis.

Portability

• Sagen mortgage insurance is portable, so home buyers can take advantage of a Lender’s portability plan. For further details, refer to the Portability Feature product overview.
• When porting from an existing standard Sagen insured loan to Borrowed Down Payment Program loan, the premium will be the lesser of:
  • The outstanding mortgage balance multiplied by 0.50% + the top-up amount multiplied by the top-up premium rate, or
  • The new loan amount multiplied by the full premium rate.

Assumptions / Assignments

• Mortgage is assumable subject to meeting Lender guidelines.

Eligible Products*

• Progress Advance Program
• Purchase Plus Improvement Program
• Vacation / Secondary Homes Program (Type A Properties)

*For specific underwriting guidelines related to the above eligible products, please refer to the applicable product overview.

Ineligible Products

• Business for Self (Alt. A) Program
• Family Plan Program
• New to Canada Program
• Vacation / Secondary Homes Program (Type B Properties)
• Investment Property Program
• Second Mortgage Program